Problem
Mr. Briggs purchased an apartment complex on January 10, 2014 for $2 million with 10% of the price allocated to land. He sells the complex on Ocotbe 22, 2016 for $2.5 miilion . Assume that 10% of the $2.5 Million selling price is allocated to land and 90% is allocated tothe building.
a. How much depreciation was allowed for 2014?
b. How much depreciation is allowed for 2016?
c. Will any of the gain be ordinary income?
d. What is the amount of gain and the character fo the gain on the sale of the building?
e. What is the amount of gain and the character of the gain on the sale of the land?
f. Will any of the gain be taxed at 25%?